Sunstone Hotel Investors has purchased a newly luxury resort, Montage Healdsburg, for a gross purchase price of $265m.
Construction of the 117-acre resort was completed in December 2020. It features 130 bungalow-style rooms and suites equipped with an outdoor fireplace and own outdoor shower.
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By GlobalDataMontage Healdsburg features 16 acres of vineyards, an 11,500ft2 spa, separate adult and family pools, more than 12,000ft2 purpose-built meeting space and many lawns for events.
The deal is funded through the issuance of $66.25m of Series G preferred equity directly to the seller, which is an affiliates of hospitality focused investment group Ohana.
Montage Hotels & Resorts will continue to manage the property.
Sunstone expects the resort to generate a 6.0% to 7.0% net operating income yield on total invested capital.
Sunstone president and CEO John Arabia said: “Leveraging our industry relationships, we acquired the Resort on an off-market basis and at a discount to what it would cost to develop today.
“The acquisition is consistent with our stated tactics of acquiring LTRR in the early phases of a cyclical recovery and putting to work a portion of our excess liquidity, all while maintaining financial flexibility and access to capital to fund incremental external growth.
“Additionally, we are funding 25% of the transaction with attractively structured perpetual preferred equity that is being issued directly to the Seller that aligns our interests and gives us additional optionality.”